Income Tax: Firm and partners are separate legal entities

The scheme of the IT Act, 1961, shows that the firm and its partners are treated as two separate legal entities so far as the provisions of tax law are concerned. While framing an order of assessment under the provisions of the IT Act, 1961, the firm and its partners are to be treated as two separate legal entities and payment of interest to a firm cannot be treated in the tax law as payment of interest to its partners. Delhi High Court Commissioner Of Income Tax vs Nagpur Golden Transport Co. Dated- 1 December, 1997 Equivalent citations: 1998 233 ITR 389 Delhi   JUDGMENT R.C. Lahoti, J. 1...